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Moves to boost consumption

SHANGHAI has pinned high hopes on more commercial venues in residential communities, theme promotions, trade exhibitions, overseas distribution network and other measures in a bid to drive its domestic consumption and ensure trade growth.

The efforts are part of the government's stimulus package to deal with the economic slowdown and financial crisis so that the city's total retail sales would increase 12 percent to 506 billion yuan (US$74 billion) this year.

In the stimulus measures, released by the Shanghai Commerce Commission yesterday, retailers are encouraged to open more stores in communities while markets and food centers will be built to improve people's daily consumption.

Among the measures, the government is asking retailers to take advantage of theme activities such as shopping festivals, fashion week and sports programs to boost sales.

Shanghai also pledged to use fiscal and administrative measures to lift foreign trade by 9 percent - the same as the estimated rise in its gross domestic product this year. It encourages exporters to buy insurance guarantees to reduce risks and to actively participate in trade exhibitions to seek business opportunities in new markets.

"The global financial crisis is deteriorating and 2009 would have the most difficulties and challenges for the development of Shanghai's economy," said Sha Hailin, director of the commerce commission.

The government also wants to boost vehicle consumption and expand the usage of credit cards as part of improved financial services to pave the way for increased consumption. Building up a distribution network in rural areas and development of a cold-chain industry also top the city government's agenda.

Shanghai expects US$10 billion worth of foreign investments into its service industries this year.

Shanghai is drafting a string of policy packages to maintain healthy economic development and will continue industrial restructuring in a bid to ride out the global economic slump. The city's GDP grew at a 16-year low of 9.7 percent last year to total 1.369 trillion yuan.


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